The past couple of weeks have been an exciting one for families across the country. People have seen their loved ones graduate from college. While this is an exciting time, it can also be a confusing one. The recent graduates are hoping to enter the workforce. Some have jobs lined up. Others do not. Either way student loans have become the norm for recent graduates. Here is a quick to do list for all graduates who have the financial burden of student loans upon graduation.
1) Know the Amount
It is crucial that you understand just how much you borrowed during your years of study. When I graduated, I had no idea how much I owed. The total ended up being $30,000, but I didn’t have the slightest idea of how much was borrowed during those years. Total up your numbers and know the amount.
2) Develop a Payback Plan
Student loans tend to have a payback period of ten years. Decide if you want to take the full ten years to pay them back. If you have other life goals you might consider paying them back earlier. I paid off mine in three years. I was tired of seeing the majority of my paycheck disappearing to loans, but it did feel good to know I bought myself seven more years of saving capability after they were paid off.
3) Reward Milestones
The process of paying back your student loans can seem insurmountable at the beginning. Have milestones that you can reward yourself for achieving. For example, go out to a nice dinner for every $5000 you pay back. This will continue to motivate you to continue toward the end result of being debt free.
Budget Smart, Invest Wise
Good advice! I would like to add that you should NOT depend on the college’s financial aid department to keep you informed of your total student loan debt. I found my daughter’s statements from both the financial aid department and the student loan service company to be completely confusing (and I used to work in banking). My advice is to keep your own records and dispute any information that does not look correct on these statements.